Achieving a great return on investment, or ROI, is the goal of every rental property investor. We’ve invited Bob, a real estate agent with Keller Williams, to talk to us about ROI on today’s blog. We will often have people buying rental property ask us about whether a particular property will provide a good return. We’ve asked Bob to shed some light on what that means and how to increase your own ROI.
Understanding What Factors Impact ROI
Whether you’re buying an investment property or selling one you currently own, you’ll want to know what kind of value it holds on the market. Rental projections are important numbers, and so are numbers like what the property could rent for and how long it may remain vacant before you earn any money on it. Those are two key factors.
Other areas to look at when figuring out the ROI would be the costs to remodel or clean up the home before it’s ready for the rental market. You would have all of that answered after the property inspection or the home inspection was performed. Other items on the list that may impact your ROI include property tax including assessment taxes, management and maintenance fees, and insurance expenses. Once all that is put together on a spreadsheet, you should review it and maybe take it to an accountant or a CPA. The amount of ROI you can expect often depends on your financial situation at the time.
Working Together with Real Estate and Management Partners
At Sacramento Delta Property Management, we do not sell real estate. At Keller Williams, Bob helps people buy and sell homes. When you’re planning to buy a rental property and you need to know what you’ll have to spend and what you can expect in terms of rent and ROI, it’s important to talk to both of us. We each do different things every day, and you’ll need a lot of expertise in order to make the right decision and have a successful investment experience.
Keeping the buying and selling part of your transaction separate from the property management portion of your investment will help you gain as much expertise and as many resources as possible during this process. I love referring clients to Realtors when they want to buy something, because they really are experts at what they do. Bob knows how to buy and sell solid real estate property and he knows how to deal with non-owner occupied properties. He definitely gives us a lot of support on the investment side, which is great.
Property management that’s professional and experienced allows you to earn more on your rental property. We keep your tenants happy and paying rent. The last thing we want are hostile tenants. We want to get a good understanding of how they feel. Tenants are just as much a part of earning more ROI as your rental value and your vacancy rate.
We’d love to tell you more about how to earn a better return on your Sacramento investment property. Please contact us at Sacramento Delta Property Management.
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